Trump's Trials - Despite Trump's pressure, high gas prices may keep Fed from cutting interest rates

Episode Date: May 29, 2026

Gas prices pushed inflation to its highest level in almost three years. That's likely to make the Federal Reserve cautious about cutting interest rates, regardless of pressure from President Trump. NPR's Scott Horsley reports.Support NPR and hear every episode of Trump's Terms sponsor-free with NPR+. Sign up at plus.npr.org.See pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

You're listening to Trump's terms. I'm Scott Detrow. Every episode, we bring you one story from NPR's recent coverage of the 47th president. With a focus on ways his administration is pushing the boundaries of presidential power. Here's the latest from NPR. From NPR news, I'm Steve Inskeep. Consumer prices are rising faster than they have in years. The latest inflation report was out Thursday for the 12 months ending in April. And NPR's Scott Horsley has been very.

Reading brings us his analysis for the same price as ever. Scott, good morning. Good morning, Steve. Okay, so I pay attention to gas prices. Not as bad as they have been. Still not great. How big a part of the inflation picture is that? Yeah, it's a big piece of it. Gas prices are up about $1.40 from before the war began. And annual inflation was 3.8% in April. That's up from 3.5% in March. So it's moving in the wrong direction. That's according to the Commerce Department, which is the inflation yardstick that the Federal Reserve,

watches most closely. Until recently, Fed Governor Chris Waller had been eager to cut interest rates because he was more concerned with the weak job market than he was with rising prices. But Waller has changed his mind now that the job market appears to be stabilizing and inflation is a growing concern. The longer the energy price shock continues, the greater the chance that these increases bleed into other prices. Given where inflation is now and the direction it's been moving. Waller and his Fed colleagues appear unlikely to lower interest rates anytime soon, even though, of course, President Trump's been pushing very hard for that. Okay, so in an ideal world, we would like inflation to be going down, economic growth to be going up. Instead,

inflation is going up. What about economic growth? Well, it turns out the economy grew more slowly in the first three months of the year than we had thought. GDP is the broadest measure of economic growth. And revised figures show GDP grew at an annual rate of just 1.6 percent in January February and March, down from an earlier estimate of 2%. Between higher prices and slower growth, it was not a great day for Treasury Secretary Scott Bessent to have to face questions in the White House briefing room yesterday, but Bessent tried to put a positive spin on the news. These are short-term challenges that we will get over. It is challenging now, but unemployment is still low. Tax refunds were high, and consumer spending is still quite high.

Tax refunds were up about 11% on average from a year ago, and that has helped to prop up spending in the face of these high prices. But, you know, once those refunds are spent, some families may struggle to make ends meet. Maybe families can pay their ever-increasing bills with a $250 bill. What do you say? Yeah, the Washington Post broke the story that the Treasury Department has been pressing the Bureau of Engraving and Printing to design a new $250 bill featuring President Trump's likeness in honor of the country. 250th birthday this year. Right now, it is against the law to put a living person's face on paper currency in the U.S. But Besson says Congress could change that law, and he wants to be ready if they do so. I don't think that there's anything untoward about having the President of the United States, that the person who was President of the United States on the 250th anniversary

bill. That brought some immediate blowback from Democrats on Capitol Hill, though. Virginia Senator Mark Warner said, if the White House put half as much energy into lowering cost as it does into stoking the president's ego, families wouldn't need a $250 bill just to fill their gas tank. Scott, thanks. You're welcome. That's NPR Scott Horsley. And before we wrap up, a thank you to our NPR Plus supporters who hear each show without

sponsored messages and, of course, who help protect independent journalism. If you are not a supporter yet, you can visit plus.npr.org to find out how you can get a ton of podcast perks across dozens of NPR shows. Like bonus episodes, exclusive merchandise, and more. Again, that's plus.npr.org. I'm Scott Detrow. Thanks for listening to Trump's Terms from NPR.